A demand non price determinant is?

Population changes, Fashions, tastes and preferences

Which of the following is an example of derived demand

An increase in demand for cars leads to an increase in tyres.

Consumer sovereignty means

consumers control what is produced in the market

Which of the following will result in a decrease in supply of bananas?

An increase in production costs, Many banana farmers giving up farming

Elastic demand occurs when:

demand changes significantly due to a small change in price

What is effect of the new higher price on resource allocation?

More resources will be allocated because supply expands

The law of supply states that

Less Q is Supplied if price drops

Define Derived Demand

This is the demand as a consequence of the demand for another good.

Apples and bananas are substitutes. If the price of apples increases, which of the following is incorrect?

The demand for bananas will decrease

Equilibrium price of a product is determined when

the amount supplied is equal to the amount demanded.

The shift for the supply of bananas is likely due to?

An excise tax placed on bananas

An expansion in demand will occur if?

There is an decrease in the price of bread

The purpose of an excise tax on cigarettes is to

Discourage consumption or production

Apple and Samsung phones are substitutes. An increase in the price of Apples on the market for Samsungs will be?

Demand will increase and supply will expand

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Test 2 revision

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Questions 25

Answers

1
Washing machines have relatively inelastic demand because?
They are in demand
They are a large % of income
You have lots of time to shop around
There are no substitutes
2
A demand non price determinant is?
Government taxes on production
Population changes
Changes in production technologies
Fashions, tastes and preferences
3
Calculate PED using the midpoint formula.
I can't do Maths
0.38
1.63
6.33
4
If the price of scooters rises by 10% and the QD decreases by 15%, the PED would be <1
True
False
5
Which of the following is an example of derived demand
An increase in demand for cars leads to an increase in tyres.
An increase in demand for cars leads to a higher price.
An increase in demand for cars leads to an increase in pollution
An increase in demand for cars leads to an increase in demand for insurance
6
If oranges have inelastic demand then?
All of above.
PED<1
Consumers are not senstive to price changes
Demand will change by a small amount if price changes a lot.
7
If the price of petrol increases then
the demand curve shifts right
the supply curve shifts left
the demand curve shifts left
the supply curve shifts right
8
The law of demand states as the price of a good increases
more quantity is demanded
less quantity is demanded
My head hurts
demand stays the same
9
Consumer sovereignty means
demand will increase and supply will expand
consumers control what is produced in the market
the government decides what to produce
firms decide what to produce
10
Which of the following will result in a decrease in supply of bananas?
Consumers decide only to eat bananas, nothing else
Banana prices are expected to fall next week
An increase in production costs
Many banana farmers giving up farming
11
Elastic demand occurs when:
the price sensitivity of consumers is very low
people eat too much over the holidays
demand changes significantly due to a small change in price
a change in price causes only a small change in the amount purchased
12
Calculate TOTAL REVENUE for each month
2,100
I have no idea
3,000
1,350 + 750
13
Which of the following goods has relatively elastic demand?
Toilet paper
Bananas
Water
Overseas flights
14
What is effect of the new higher price on resource allocation?
Less resources will be allocated because supply contracts
More resources will be allocated because supply expands
More resources will be allocated because supply contracts
Less resources will be allocated because supply expands
15
Complementary Goods are goods that...
Are consumed separately
Are consumed jointly
Are a personal union of dynasties from 16th century Europe
Are inversely related
16
The law of supply states that
Less Q is Supplied if price drops
More Q is Supplied if price drops
More Q is Demanded if price increases
Supply must equal demand
17
Define Derived Demand
This is the supply as a consequence of the supply for another good.
This is the supply as a consequence of the demand for another good.
This is the demand as a consequence of the demand for another good.
18
Apples and bananas are substitutes. If the price of apples increases, which of the following is incorrect?
The demand for bananas will increase
The demand for bananas will decrease
The QD for apples will fall.
There will be an expansion in supply of bananas
19
Equilibrium price of a product is determined when
the amount supplied is equal to the amount demanded.
businesses compute the average selling price in the area.
businesses total their costs and markup.
research shows what the market will tolerate.
20
The shift for the supply of bananas is likely due to?
A fall in the price of bananas
A rise in the price of bananas
An excise tax placed on bananas
Consumers expecting a price increase
21
An expansion in demand will occur if?
If there is an increase in the price of bananas
People have more income
There is an decrease in the price of bread
If everyone goes on a diet
22
The purpose of an excise tax on cigarettes is to
Discourage consumption or production
Encourage people to swap to other less harmful habits
I'm not sure
Encourage consumption or production
23
Apple and Samsung phones are substitutes. An increase in the price of Apples on the market for Samsungs will be?
Demand will increase and supply will expand
Demand will increase and supply will contract
A shift of supply to the right
Demand will decrease and supply will expand
24
The demand for Cathy's Cakes is elastic so putting up the price will lead to more TR
True
False
25
The equilibrium price of bananas is?
I'm not sure
Between $4 and $5
$5
$4

Test 2 revision Flashcards | StudBud